Thursday November 1 2012
Hard assets like gold and oil advanced yesterday as stocks rose and then fell to where they started.
It is interesting just how fast the bloom has come off Apple. There is no lack of competing tablets on the market, I expect Apple was fully priced at $700.
GM was up $2.22 yesterday, I came in for some witticism over my GM recommendation and yes I sold it too, investing in individual stocks is a trying experience. GM has a solid balance sheet much more so than Ford but too many investors just cannot get over the Government Motors idea. A maker of the Volt Batteries took bankruptcy.
SIL has barely budged while other commodity plays have pulled back from the Sept 14 market top.
150 Day Indicator
It appears that the market has worked off the excess of Sept 14. Note the bounce right at the 125 day MA line I have added to my charts. Adding these additional MAs seems logical and at these points but I have not noticed anyone else doing it.
Daily High Low
More than any other this indicator prompted my exit from the market in September. Now it is ticking back up. As we have said we are close we think time wise to a final top in the market. The previous high was in the 1470 range.
bull - TLT exhibits a reverse head and shoulders patter, MACD is flat, it bounced off the 200 day MA numerous times showing buying strength
bear - TLT has not broken above a downtrend line extending from the July high. It has not been able to stay over its 50 day MA.
I am going to begin accumulating SIL again.
What Stock is this?
This stock is down 15% from February. It was one of the very best to weather the recession with low priced items the public liked. Would your favorite guru on CNBC have shorted it in February, which as we now know was the correct position? I don't recall anyone recommending a short on MCD in February. I mention this to give you a stark preview of what to expect over the next two years, negative surprises. If I have been unusually non committal to the market, this is why. The icebergs lie ahead.
Recall the Titanic mamaged to graze one of the icebergs tearing a long gash in the hull as a result of attempting to set a speed record across the Atlantic. Had the Titanic slowed and taken a longer southern route, it might be a floating museum today. As it is we must use a submerged camera to tour the museum today. Let's not make the same mistake the Titanic made.
Lots of reports, the election, the Hurricane Sandy, etc but the big, big picture remains unchanged, we are headed into a multi-year top. Yesterday the head of the World Trade Organization stated that France is not competitive with even the rest of pretty much socialist Europe. Hong Kong was deemed the most successful world stock exhange two years running. As Jim Rogers says, the Chinese Communists are the world's best capitalists. China officially commissioned its first aircraft carrier which it says is not an aircraft carrier Sept 25 2012. Interestingly a Chinese trading company bought the hull for a mere $20 M from a Russian shipyard. The stated goal was a museum in Macau. Sure, we all believed that. My point is that the power shift from West to East continues.
I will reprint my weekly newspaper column this Sunday when it will appear in newspapers. My take is that the winner of the Election is pre-ordained and the winner is
America's Creditors and Entitlement Beneficiaries
Obama or Mitt, either will be working for those two groups.
By the way natural disasters often contribute to the making of a market top. The Kobe earthquake occurred in Japan in 1995, five years after the top of that market. I note the headline in the WSJ forecasts a severe hit for the NE corridor with hotels and airlines already unable to make up cancellations.